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The new cards, called Propel 365 and Propel
World, offer rewards to consumers who are either big everyday
spenders or frequent fliers and who also have another account
with Wells Fargo. Cardholders can get up to an extra 50 percent
increase in their reward points each year depending on the size
of their other accounts at Wells Fargo.
Wells Fargo is looking to bulk up its credit card business,
where the bank believes it punches below its weight. It is one
of the largest U.S. mortgage and auto lenders, but has a weaker
market position in credit cards.
The San Francisco-based bank currently captures only a sliver of
affluent consumers' spending. A Wells Fargo executive said in a
November investor presentation that around 3 percent of
consumers who charge over $100,000 annually on their credit
cards do it through a Wells Fargo product.
"We know we're underpenetrated in this customer base, and we're
looking to build our share," Beverly Anderson, the head of Wells
Fargo's consumer financial services group, told Reuters in an
interview.
It's a customer segment where Wells Fargo has some catching up
to do. The head of JPMorgan Chase & Co's credit card business,
Eileen Serra, said at the bank's February investor day that over
half of affluent consumers in the market for a new credit card
would consider going with Chase primarily. Wells Fargo did not
appear on a slide in an accompanying presentation comparing
Chase's popularity against rival issuers.
Wells Fargo announced its agreement with American Express in
August 2013. Since the third quarter, the company had been
testing its new offerings in five pilot markets around the
country.
In another bid to boost its credit-card business, Wells Fargo
said in April it would issue and service credit cards for
department store Dillard's Inc.
(Reporting by Peter Rudegeair; Editing by Bernard Orr)
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